The baby milk scandal stalking France's Lactalis

PARIS (Reuters) - French dairy giant Lactalis is scrambling to get on top of a growing crisis, with dozens of babies infected with salmonella after drinking tainted baby formula produced by the company.

Following are details on the family-owned group and the health scare that has led to the threat of multiple lawsuits.

WHAT IS LACTALIS?

The privately held firm is the world’s largest producer of cheese and one of the world’s largest dairy groups.

Founded in Laval, southwest of Paris, in 1933, the company has expanded steadily over generations of the Besnier family. Its takeover of Italy’s Parmalat (PLT.MI) in 2011 turned it into a major global player.

It now has 75,000 employees and 246 factories in 47 countries across Europe, the Americas, Asia and Africa, and says its annual sales are around 17.3 billion euros ($21 billion).

Its most famous product is the President brand of Camembert cheese.

The crisis has forced the famously private company to try to be more transparent. Chief Executive Emmanuel Besnier, a 47-year-old who rarely shows his face in public, has been forced to give his first interviews since he took office in 2000.

WHEN DID THE LATEST CRISIS BEGIN?

On Dec. 1, 2017, tests by the French Health Ministry confirmed that 20 babies had been contaminated by formula produced at the Lactalis factory in Craon, western France.

On Dec. 2, it issued a recall of 12 suspected baby milk batches, followed by a further recall of 625 batches on Dec. 12 and a third on Dec. 21.

Lactalis halted operations at the factory on Dec. 8 and announced on Jan. 11 the temporary layoff of 250 workers.

On Jan. 12, Lactalis said it would take back all products ever produced at Craon.

The recall concerns more than 12 million baby milk tins in France and abroad, from China to Algeria and Spain. Lactalis said the recall targeted 83 countries in all.

On Feb. 1, Besnier said Lactalis could have been producing salmonella-tainted baby milk at Craon since 2005. He said the crisis was likely to cost the company hundreds of millions of euros.

HOW WAS THE MILK INFECTED?

Last year’s contaminations have been linked to a salmonella outbreak in 2005 at the Craon plant, then owned by Celia, which contaminated over 140 babies. Lactalis took over Celia in 2006.

The salmonella is believed to have been revived following work in the factory in the first half of the year.

HOW HAS LACTALIS REACTED?

As well as the recalls and promising to compensate affected families, it has said it will permanently close the facility at the Craon plant in which the salmonella was discovered.

Besnier has questioned the effectiveness of 16,000 tests performed by an unidentified private laboratory last year that had revealed nothing.

“If the analysis of end-products had revealed the presence of Salmonella Agona, we would of course not have marketed the products and we would have avoided the crisis,” Lactalis said in a statement.

It has pledged to reinforce controls on baby milk products and have tests performed by a second laboratory.

NUMBER AND LOCATION OF AFFECTED BABIES

France’s Institut Pasteur, the research centre that monitors salmonella, says more than 200 babies have been contaminated since 2005 with Salmonella Agona, the bacteria found at Lactalis’ Craon factory.

Of these, 141 were contaminated in 2005, another 25 between 2006 and 2017, and 38 in the latest outbreak.

French health authorities have said 36 of the 38 cases last year were clearly linked to Lactalis milk, as well as one in Spain and a suspected one in Greece. A group representing victims’ families say at least 10 more cases are unaccounted for.

WHAT IS SALMONELLA?

The main symptoms of salmonella infection are stomach ache and diarrhoea, which can lead to dehydration.

It can be life-threatening for infants or people weakened by illness. Most healthy people recover within a few days without specific treatment.

LEGAL ACTION

Several families have already filed complaints against Lactalis. Some are also planning to take action against French supermarket chains which were selling recalled products despite the recall.

French supermarket chains Leclerc, Auchan, Carrefour (CARR.PA) and Systeme U have all acknowledged that some of the baby milk remained on their shelves after the recall.

Two complaints are already targeting Auchan and Leclerc.

Class action lawsuits are not possible in France. Each family must file a complaint separately.

A group of victims said they would pursue their legal complaints regardless of any compensation offered.